Just In From The Fraser Institute: The true cost of ‘Truth and Reconciliation’
A new Fraser Institute study says inflation-adjusted federal Indigenous spending surged nearly 300% over a decade — more than seven times faster than overall federal program spending.
Federal spending on Indigenous programs has nearly quadrupled over the past decade, climbing from $10.3 billion in 2014-15 to $40.8 billion in 2024-25 after adjusting for inflation, according to a new Fraser Institute study.
The study, The Cost of Federal Spending for Indigenous Peoples in British Columbia, found Indigenous spending grew at an average annual rate of 17.1 per cent from 2015-16 to 2024-25, compared with 4.3 per cent annually between 1969-70 and 2014-15.
“Ottawa’s Indigenous spending has skyrocketed in recent years, even more so than general federal spending which itself has increased substantially,” said study co-author and Fraser Institute senior fellow Tom Flanagan.
Overall, Indigenous spending increased 297.7 per cent over the decade, compared with 42% for federal program spending excluding interest — more than seven times the rate of growth.
The figures exclude spending on Indigenous lawsuits and settlements from 2015-16 onward.
Researchers estimate $8.8 billion in Indigenous spending went to Ontario and $6.3 billion to B.C., though the figures include administrative costs — not money directly received by individuals.
But the study questions whether the spending surge has produced corresponding improvements in living standards.
Statistics Canada’s The Community Well-Being gap barely changed from 1981 to 2016, while researchers attributed later gains largely to the Canada Child Benefit rather than Indigenous-specific spending.
Federal auditors have raised similar concerns about results.
In October 2025, Auditor General Karen Hogan found Indigenous Services Canada had made “unsatisfactory progress” on 18 of 34 recommendations examined across areas including drinking water, health care and emergency management.
The department’s spending increased roughly 84 per cent between 2019-20 and 2023-24 — from $13.3 billion to $23.9 billion. Yet 35 long-term drinking-water advisories remained as of April 1, 2025, including 9 that had lasted at least a decade.
A separate 2024 audit found Indigenous Services Canada and the Canada Mortgage and Housing Corporation spent $3.86 billion over five years on First Nations housing but achieved “no meaningful improvement” in overall housing conditions.
The Fraser Institute also raised concerns about financial transparency, saying Ottawa is not enforcing the First Nations Financial Transparency Act. Financial reports were publicly available for just 41 per cent of First Nations in 2024-25, according to the study.
Indigenous Services Canada previously reported compliance with the Act fell from 99 per cent in 2013-14 to 64 per cent by 2019-20, citing factors including capacity issues and community emergencies.
Ottawa stopped enforcing the Act’s compliance measures in 2015, shifting toward First Nations-led accountability, though the law remains in force.
Ottawa stopped using the Act’s discretionary compliance measures in 2015 as it shifted toward First Nations-led accountability. The law remains in force, and the department says more than 300 First Nations financial administration laws contain provisions requiring audited statements to be shared with citizens.
The transparency fight has also reached Federal Court.
In a recent case involving Frog Lake First Nation, Hans McCarthy sought band council records held by Indigenous Services Canada concerning payments from his community’s trust fund to council members for salaries and expenses.
According to the Canadian Taxpayers Federation, which partnered with McCarthy, the fund contained approximately $102 million in 2013 but less than $9 million remained by 2024.
After Indigenous Services Canada refused access-to-information requests seeking Band Council Resolutions authorizing payments from the trust fund, McCarthy challenged the decision.
“If the purpose of the [Access to Information Act] is to enhance ‘accountability’ and ‘transparency,’ ‘promote an open and democratic society,’ and ‘enable public debate,’ the governance relationship between the Applicant and Frog Lake First Nation cannot be ignored,” the court said.
The court rejected the department’s blanket refusal and sent the matter back for redetermination concerning specific information. It also found information concerning chief and councillor remuneration was intended to be publicly available under the First Nations Financial Transparency Meryl Sarty – Political Activist
Indigenous Services Canada subsequently prepared a December 2025 briefing note titled “Appeal of the Hans McCarthy v Indigenous Services Canada Decision,” which was submitted to the department’s deputy head for a decision.
McCarthy has called for a dedicated First Nations auditor general. The idea is not new: the Assembly of First Nations and Ottawa previously commissioned research into establishing such an office as part of their work on a new fiscal relationship.
Ottawa says increased Indigenous spending is intended to advance reconciliation, improve services and support greater Indigenous self-determination.
The federal government estimated annual spending on Indigenous priorities rose from $11.4 billion in 2015-16 to $33.1 billion in 2024-25 and said more than $60 billion had been provided since 2016 to resolve Indigenous claims and compensate for historical harms.
Ottawa’s $33.1-billion figure is not directly comparable with the Fraser Institute’s $40.8-billion estimate because they use different definitions and accounting methods. The Fraser Institute focuses largely on Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada and removes lawsuit and settlement spending from its post-2015-16 figures.
“Canadians need to understand the magnitude of Ottawa’s Indigenous spending in recent years if they’re ever to properly assess what that additional spending is achieving in terms of results for Indigenous people,” Flanagan said.
The study is the first in a planned series examining government spending on Indigenous peoples towards the goal of ‘Truth and Reconciliation
